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Individual Development and Empowerment Account (IDEA) Program
Under the IDEA Program, the Bank sets aside a portion of its annual Affordable Housing Program (AHP) contribution to provide matching grants through Bank members for downpayment and closing cost assistance to eligible first-time homebuyers who have saved under Individual Development Account (IDA), Family Self-Sufficiency (FSS), or lease-to-own programs.
Uses
- Promote homeownership opportunities for very low-, low-, and moderate-income households
- Support home retention strategies
- Build and maintain relationships with new customers
- Expand deposits and the use of your institution’s financial products
- Help achieve your institution’s community investment goals
Key Advantages
- Provides up to $15,000 for each participating household, matching up to $3 for each $1 saved by the homebuyer(s)
- Application process allocates funds for homeownership based on program eligibility, not on competitive scoring
Key Features and Guidelines
Funds Available
The Bank expects to set aside a percentage of its annual AHP contribution each year to fund the IDEA Program.
Members may apply for an annual reservation of IDEA funds for up to $1,000,000.
If the Bank receives requests for IDEA funds that exceed the amount set aside for the program for that year, the Bank will allocate available funds to eligible applicants in accordance with the Bank’s AHP Implementation Plan.
Applications
Application deadlines and materials are typically posted on the Bank's website at the beginning of the year.
Applications must include:
Homebuyer Eligibility
To be eligible for IDEA funds, the homebuyer must meet the following eligibility criteria:
Homebuyer has enrolled in the IDEA Program.* Homebuyer has participated in an IDA program, successfully completed an FSS program leading to homeownership through a local housing authority, or participated in a lease-to-own program administered by a government entity or nonprofit organization. Homebuyer has saved towards the purchase of a home for either a minimum of 10 months with an IDA or FSS program, or 3 years with a lease-to-own program. Homebuyer has successfully completed a homebuyer counseling program. Homebuyer is a first-time homebuyer, as defined by the member. - Homebuyers must meet income eligibility guidelines as published by the Bank and earn 80% or less of the HUD AMI at the time of enrollment in the Bank’s IDEA Program, and must open escrow on a home purchase transaction within five years of the time of enrollment in the IDEA Program.
* Enrollment in the IDEA Program is not a guarantee to the homebuyer of receipt of funds.
Use of Funds
IDEA funds may only be used toward downpayment or reasonable or customary closing costs in conjunction with the purchase of housing to be used as the primary residence of the homebuyer. IDEA funds may not be used by the member or the homebuyer in conjunction with projects or units receiving other subsidies from the Bank through its competitive AHP or other set-aside programs.
Disbursement of Funds
The Bank will reimburse the member after receipt of the HUD-1 settlement statement showing that the amount of subsidy requested was passed on to the homebuyer and used for eligible purposes. If the settlement statement or other closing documents show cash to the homebuyer in an amount greater than $250, then the AHP set-aside subsidy that the Bank will reimburse to the member for the homebuyer will be reduced unless the member and the homebuyer provide sufficient documentation showing that the cash back was used for downpayment or reasonable and customary closing costs or to pay down the mortgage principal or as a credit toward the household's monthly payment on the mortgage loan.
In addition, the member must submit certain certifications and sufficient documentation prior to the disbursement of funds, including:
A completed IDEA enrollment form. - Certification that the households and units funded satisfy IDEA Program guidelines and that the units are subject to a deed restriction or other legally enforceable retention mechanism that meets the requirements of applicable regulations and policies of the Federal Housing Finance Agency.
Certification that the homebuyer is a first-time homebuyer, as defined by the member. A copy of the retention mechanism securing the IDEA funds. Documentation verifying that the homebuyer is income-eligible as stated under “Homebuyer Eligibility” above. Certificate of completion of homebuyer counseling program. The member must certify that the set-aside funds are being used for an eligible purpose and that the interest rate, points, fees, and other charges for all loans made in conjunction with the AHP direct subsidy shall not exceed a reasonable market rate of interest, points, fees, and any other charges for loans of similar maturity, terms, and risk.
Disbursement requests with all supporting documentation must be received by the Bank within four months of the date that the homebuyer closes on the purchase transaction. Any outstanding documentation for the submitted disbursement request must be received by the Bank within four months from the date that the Bank receives the disbursement request. If the member does not comply with these deadlines, the Bank reserves the right to decline the reimbursement of subsidy to the member.
Time Limits for Use of Subsidy
IDEA Program funds that are reserved in a given year must be used by the member to assist eligible households by March 31 of the following year. Home purchase escrows opened on or prior to March 31 of the following year may be considered eligible for reimbursement.
Additional Guidelines
The IDEA Program is part of the Bank’s Affordable Housing Program and is administered in accordance with the Federal Home Loan Bank Act, the applicable regulations and policies of the Federal Housing Finance Agency, and the applicable requirements and policies of the Bank, including, without limit, the Bank’s AHP Implementation Plan, all as amended from time to time. Members participating in the IDEA Program must execute an Affordable Housing Program Direct Subsidy Agreement—Homeownership Set-Aside Program and must meet the Bank’s standards of creditworthiness.
Last Modified: December 2011
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Individual Development and Empowerment Account (IDEA) Program
Under the IDEA Program, the Bank sets aside a portion of its annual Affordable Housing Program (AHP) contribution to provide matching grants through Bank members for downpayment and closing cost assistance to eligible first-time homebuyers who have saved under Individual Development Account (IDA), Family Self-Sufficiency (FSS), or lease-to-own programs.
Uses
- Promote homeownership opportunities for very low-, low-, and moderate-income households
- Support home retention strategies
- Build and maintain relationships with new customers
- Expand deposits and the use of your institution’s financial products
- Help achieve your institution’s community investment goals
Key Advantages
- Provides up to $15,000 for each participating household, matching up to $3 for each $1 saved by the homebuyer(s)
- Application process allocates funds for homeownership based on program eligibility, not on competitive scoring
Key Features and Guidelines
Funds Available
The Bank expects to set aside a percentage of its annual AHP contribution each year to fund the IDEA Program.
Members may apply for an annual reservation of IDEA funds for up to $1,000,000.
If the Bank receives requests for IDEA funds that exceed the amount set aside for the program for that year, the Bank will allocate available funds to eligible applicants in accordance with the Bank’s AHP Implementation Plan.
Applications
Application deadlines and materials are typically posted on the Bank's website at the beginning of the year.
Applications must include:
Homebuyer Eligibility
To be eligible for IDEA funds, the homebuyer must meet the following eligibility criteria:
Homebuyer has enrolled in the IDEA Program.*
Homebuyer has participated in an IDA program, successfully completed an FSS program leading to homeownership through a local housing authority, or participated in a lease-to-own program administered by a government entity or nonprofit organization.
Homebuyer has saved towards the purchase of a home for either a minimum of 10 months with an IDA or FSS program, or 3 years with a lease-to-own program.
Homebuyer has successfully completed a homebuyer counseling program.
Homebuyer is a first-time homebuyer, as defined by the member.
- Homebuyers must meet income eligibility guidelines as published by the Bank and earn 80% or less of the HUD AMI at the time of enrollment in the Bank’s IDEA Program, and must open escrow on a home purchase transaction within five years of the time of enrollment in the IDEA Program.
* Enrollment in the IDEA Program is not a guarantee to the homebuyer of receipt of funds.
Use of Funds
IDEA funds may only be used toward downpayment or reasonable or customary closing costs in conjunction with the purchase of housing to be used as the primary residence of the homebuyer. IDEA funds may not be used by the member or the homebuyer in conjunction with projects or units receiving other subsidies from the Bank through its competitive AHP or other set-aside programs.
Disbursement of Funds
The Bank will reimburse the member after receipt of the HUD-1 settlement statement showing that the amount of subsidy requested was passed on to the homebuyer and used for eligible purposes. If the settlement statement or other closing documents show cash to the homebuyer in an amount greater than $250, then the AHP set-aside subsidy that the Bank will reimburse to the member for the homebuyer will be reduced unless the member and the homebuyer provide sufficient documentation showing that the cash back was used for downpayment or reasonable and customary closing costs or to pay down the mortgage principal or as a credit toward the household's monthly payment on the mortgage loan.
In addition, the member must submit certain certifications and sufficient documentation prior to the disbursement of funds, including:
A completed IDEA enrollment form.
- Certification that the households and units funded satisfy IDEA Program guidelines and that the units are subject to a deed restriction or other legally enforceable retention mechanism that meets the requirements of applicable regulations and policies of the Federal Housing Finance Agency.
Certification that the homebuyer is a first-time homebuyer, as defined by the member.
A copy of the retention mechanism securing the IDEA funds.
Documentation verifying that the homebuyer is income-eligible as stated under “Homebuyer Eligibility” above.
Certificate of completion of homebuyer counseling program.
The member must certify that the set-aside funds are being used for an eligible purpose and that the interest rate, points, fees, and other charges for all loans made in conjunction with the AHP direct subsidy shall not exceed a reasonable market rate of interest, points, fees, and any other charges for loans of similar maturity, terms, and risk.
Disbursement requests with all supporting documentation must be received by the Bank within four months of the date that the homebuyer closes on the purchase transaction. Any outstanding documentation for the submitted disbursement request must be received by the Bank within four months from the date that the Bank receives the disbursement request. If the member does not comply with these deadlines, the Bank reserves the right to decline the reimbursement of subsidy to the member.
Time Limits for Use of Subsidy
IDEA Program funds that are reserved in a given year must be used by the member to assist eligible households by March 31 of the following year. Home purchase escrows opened on or prior to March 31 of the following year may be considered eligible for reimbursement.
Additional Guidelines
The IDEA Program is part of the Bank’s Affordable Housing Program and is administered in accordance with the Federal Home Loan Bank Act, the applicable regulations and policies of the Federal Housing Finance Agency, and the applicable requirements and policies of the Bank, including, without limit, the Bank’s AHP Implementation Plan, all as amended from time to time. Members participating in the IDEA Program must execute an Affordable Housing Program Direct Subsidy Agreement—Homeownership Set-Aside Program and must meet the Bank’s standards of creditworthiness.
Last Modified: December 2011
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